Steve Wren, Tax Partner commented “What followed, whilst welcome, felt somewhat underwhelming and I can’t help but think this may just be a taster of perhaps more meaningful headlines to come in the Spring Budget in March 2024 when election campaigns could potentially be in full swing.”
In an attempt to balance the books, the freezing of rate bands and allowances has boosted Treasury coffers. The abolition of Class 2 NIC and reduction of the Class 4 rate for the self-employed will be a welcome reduction and simplification, however it is noticeable that with only a 1% reduction in class 4 NIC it is perhaps less generous than for employees. With wages increasing above the current rate of inflation and bandings frozen, employers NIC will continue to rise for hard pressed businesses looking to retain and attract staff.
For Companies, the permanence of the full expensing relief for new equipment was widely anticipated and trumpeted by the Chancellor but, in reality, is only relevant for 2026/27 onwards. It does, however, allow corporate businesses to plan for significant future expenditure projects with some confidence in relation to the tax outcome.
While the mention was fleeting in the Chancellor’s address, the final details of the reforms to Creative Industry Tax Reliefs and Audio-Visual Tax Reliefs have now been confirmed. After lobbying hard, along with fellow advisors, it seems that the government has listened and included some of the key amendments that we had all been hoping for. However, there is much to be analysed and further details will follow over the coming weeks but it looks to be encouraging for our clients in these sectors.
Read full details of the effects of the changes on individuals and businesses across the industries here: SRLV Autumn Budget Statement 2023